How large enterprise companies and startups need to rethink the ways they can work together

In this episode of ‘In Conversation With,’ Ravi Srivatsav (CPO and CBDO at NTT i3) joins Gokul Rajaram (Product Engineering Lead at Square) at NTT i3’s offices in Palo Alto, CA. The topic: how large enterprise companies and startups need to rethink the ways that they can more effectively and creatively work together.

(“In Conversation With” is a video series where NTT i3 executives engage in conversation with some of our most visionary partners at NTT’s Operating Companies and global enterprise customers, futurists, and leading Silicon Valley technologists, entrepreneurs, and researchers. The explorations may be around current and near future developments in IoT, big data analytics, machine learning, AI, network virtualization, and security. At times, we also investigate the human impact of technology and the role our values and culture have on how we decide to use what we are inventing.)

Ravi

Hey Gokul. Thank you very much for coming to our NTT i3 office in Palo Alto. I really appreciate your time.

Gokul

Absolutely. Great to be here.

Ravi

I want to take some time and talk with you about how startups and enterprise can more effectively and creatively work together. There’s a lot of interest in the Valley about established enterprise companies engaging with startups, and obviously startups want to work with enterprises. But the marriage is not always correct. So we want to figure out what the right mechanics are for both to succeed.

Gokul

We’ve both worked in startups and large enterprises. On paper it seems like a match made in heaven. Startups are great at building new products. Enterprises are good at scaling products, getting them to marketing, getting the distribution. And they have money. So in theory, it should be a match made in heaven. Many times it doesn’t work.

Ravi

It seldom works. There are very few startups that have succeeded at this, but the ones who do succeed actually do very well. So there is obviously some kind of magic to be found in this kind of relationship.

There are some ground rules that large enterprises and startups need to follow in working together. Startups need to understand the real motivations for a large enterprise to work with them. And large enterprises need to rethink the processes that become barriers fro working with startups. So often they actually overwhelm startups with paperwork by dealing with them as if they were a large vender. Startups aren’t equipped for that. We need to understand the mindset of startup and not inundate them with the standard paperwork.

Gokul

That’s right. For startups, the number one scarce commodity that they have is time and their own bandwidth. You can’t think of them as a large vendor. You’ve got to be cognizant and respectful of their time.

But I think it starts even earlier than this. A lot of large enterprises who say they want to work with startups neglect to think about what it means to build relationships with startups. Ultimately a lot things are not company to company – they’re person to person. A startup needs to find a champion at the large enterprise, and the large enterprise needs to find a like-minded person at the startup who wants to work together.

I’m sure that when you were at a startup you probably found the right champion. Without the right champion in the large enterprise, it’s just a faceless monolith.

Ravi

I’ve always believed missionaries and mercenaries exist within both startups and large enterprises. It’s the missionaries who actually take the product from a mission perspective to understand how it actually solves a repeatable problem. Then they can make an informed decision to work with the startup, to invest the time and money that it takes to understand, fine-tune, and then take the technology to market. If you take a very mercenary approach to working with a startup, you’re merely looking to take their product and use it in the service of helping you sell something else. This approach never works out.

Gokul

I completely agree. I think a mission-driven approach needs to be shared between the two companies. They need to have alignment around the kind of customer they want to serve. Everything always needs to start from a point of vision and mission alignment, and then other things will work themselves out. Obviously there are bumps along the way, but those bumps can be solved if your vision and mission are aligned.

The other thing that I believe is important is this: Starting small. A lot of startups try to boil the ocean and large enterprises also often try to do that too. Find a small success story to figure out what the right criteria are – that’s always a good way to dip your toes in and start working together. Don’t start by trying to do something at a really large scale, because again, startups don’t have the ability to do something large scale. Startups want to respect and preserve their bandwidth. Start with something small that can be measured. Start with something that is a bite-sized chunk versus massive.

Ravi

Absolutely.

Next: Ravi and Gokul talk about how the role of failure as an important platform for learning in both startups and in enterprise incubators. Or, click here to check out all of the videos in our “In Conversation With” series.